ACCOUNTING FOR GOVERNMENTAL & NONPROFIT
18th Edition
ISBN: 9781260588583
Author: RECK
Publisher: MCG
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Question
Chapter 9, Problem 1Q
To determine
State the circumstances under which a special purpose government will be considered as primary government.
Expert Solution & Answer
Explanation of Solution
Primary Government: As per GASB “a primary government is a state government or general purpose government. Primary government can also be treated as special purpose government that has a separate elected governing body, is legally separate and is fiscally independent of other state or local governments”. A legally separate organization has its own identity as “artificial person” with a personality and existence different from its creators and others. A special purpose government can be a fiscally independent organization by having authority to decide the budget, levy its own taxes, set rates or charges, and issue bonded debt without approval of another government.
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Students have asked these similar questions
Which of the following is necessary for a special purpose local government to be viewed as a primary government for reporting purposes?
It must have a separately elected governing body.
It must have specifically defined geographic boundaries.
It must be fiscally independent.
It must have corporate powers to prove that it is legally independent.
Which of the following best describes a “primary government”?
Select one:
A. A primary government must be both legally separate and fiscally independent.
B. A primary government, although legally separate, may be fiscally dependent upon another governmental entity.
C. Although a primary government has a separately elected governing body, it may not be a legally separate entity.
D. The only requirement is for a primary government to have a separately elected governing body; It does not have to be either legally separate or fiscally independent.
Authoritative GAAP for state and local governments is divided into two categories with the first category having more authority than the second. What sources of GAAP are found in both of these categories?
Chapter 9 Solutions
ACCOUNTING FOR GOVERNMENTAL & NONPROFIT
Ch. 9 - Prob. 1QCh. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - What is a component unit?Ch. 9 - Explain the difference between a blended and a...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Give examples of items (transactions) that would...Ch. 9 - Prob. 10Q
Ch. 9 - Prob. 11QCh. 9 - Prob. 12CCh. 9 - The MDA for the 2016 City and County of Denver...Ch. 9 - Prob. 14CCh. 9 - Prob. 17.1EPCh. 9 - Prob. 17.2EPCh. 9 - Prob. 17.3EPCh. 9 - Interim government financial reports a. Are not...Ch. 9 - The comprehensive annual financial report (CAFR)...Ch. 9 - Prob. 17.6EPCh. 9 - The city council of Lake Jefferson wants to...Ch. 9 - Prob. 17.8EPCh. 9 - Prob. 17.9EPCh. 9 - Prob. 17.10EPCh. 9 - A positive unassigned fund balance can be found in...Ch. 9 - A city established a special revenue fund for gas...Ch. 9 - The county commission passed into law through an...Ch. 9 - Prob. 17.14EPCh. 9 - Prob. 17.15EPCh. 9 - Prob. 18EPCh. 9 - Prob. 19EPCh. 9 - The City of Lynnwood was recently incorporated and...Ch. 9 - Prob. 21EPCh. 9 - Prob. 22EPCh. 9 - Prob. 23EPCh. 9 - Prob. 24EPCh. 9 - You have recently started working as the...Ch. 9 - Prob. 26EPCh. 9 - Prob. 27EP
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Similar questions
- Which of the following is not necessary for a special purpose local government to be viewed as a primary government for reporting purposes? Choose the correct.a. It must have a separately elected governing body.b. It must have specifically defined geographic boundaries.c. It must be fiscally independent.d. It must have corporate powers to prove that it is legally independent.arrow_forwardExplain the makeup of a primary government and its relationship to component units and related organizations as well as the combination of governments.arrow_forwardWhat are the basic financial statements that a state or local government now produces?arrow_forward
- What are the key sources of revenues among the federal, state, and local governments? What are the key differences?arrow_forwardWhy have accountability and control been so important in the traditional accounting for state and local government units?arrow_forwardThe .... requires the identification of the policy objectives of government which are actually operative.arrow_forward
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- Special purpose governments differ from general purpose governments in that special purpose governments: a. Provide a single function or limited range of functions. b. Do not have the power to levy taxes. c. Derive their power from state governments. d. All of the above.arrow_forwardBased on the American “constitution,” which internal and external stakeholders, in the policy making process, possess “constitutional legitimacy” for their role in making public policy? Do entities with explicit power have more influence than those entities with implied powers in making public policy? Should they? Why or why not?arrow_forwardWhich of the following is not a power that a municipality must have to be considered fiscally independent of other governments? A.) To determine its budget B.) To levy taxes and set rates C.) To establish debt limitations D.) To issue bondsarrow_forward
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